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DELAWARE GROUP
Global Dividend
and Income Fund
service and guidance
professional management
goals
CLOSED-END INCOME
1999
Semi-Annual
Report
[PHOTO OF ILLUSTRATION FROM
CURRENT INCOME BROCHURE]
DELAWARE(SM)
INVESTMENTS
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Philadelphia o London
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Investment
Objectives and
Strategies
Delaware Group Global
Dividend and Income
Fund's Objective
To provide high current income, and secondarily, capital appreciation. To
achieve this, the Fund is diversified among different asset classes as described
below. Asset class concentration depends on the portfolio managers' assessment
of each market's relative risks and rewards.
U.S. Common Stocks with
Above-Average Yields
The Fund's management focuses on stocks that pay high dividends relative to
their share price. Such high-yield stocks can point the Fund to strong companies
whose stocks have capital appreciation potential. The dividend income from these
stocks has the potential to add to total return.
Convertible Preferred
Stocks and Bonds
The Fund invests in both convertible preferred stock and convertible bonds. Both
pay fixed rates of income, but because they can be converted into common stock,
they are indirectly tied to the common stock's performance. As a result,
convertible securities generally offer higher income than common stocks and an
opportunity for price appreciation when the value of the underlying security
rises. The Fund may buy convertibles when the underlying common stock offers
strong growth potential but a low yield.
High-Yield Corporate Bonds
High-yield bonds, those rated BB or lower, have greater default risk than bonds
with higher quality ratings, but have the potential for a higher level of income
to compensate investors for the additional risks. Prices of high-yield bonds
tend to be less sensitive to changes in interest rates than higher rated bonds.
Foreign Stocks
In evaluating foreign stocks, the Fund's management takes into account risks
that include a country's inflation outlook, economy, politics, different
accounting standards, tax policies and effect of currency fluctuations. The
value of the company's projected dividend stream is "discounted" for these risks
so that management has a consistent yardstick to compare stocks around the
globe.
Foreign Bonds
The Fund invests in foreign government and corporate bonds whose total return
potential relative to currency, political and economic risk, appears attractive.
In order to reduce currency risk, the Fund may buy foreign bonds denominated in
U.S. dollars rather than the currency of the country issuing the bonds.
Leveraging
About $25 million (24%) of your Fund's net assets were leveraged as of May 31,
1999. Leveraging is a tool that is generally not available to open-end mutual
funds and one that can be an important contributor to your Fund's income and
capital appreciation. Of course, there is no guarantee the Fund will achieve its
objective by using leveraging. Leveraging could result in a higher degree of
volatility because the Fund's net asset value could be more sensitive to
fluctuations in short-term interest rates and equity prices. We believe this
risk is reasonable given the potential benefits of higher income.
current income
commitment
A TRADITION OF SOUND INVESTING
(photo of glasses, pen and keyboard)
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June 7, 1999
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Dear Shareholder:
World securities markets experienced a significant recovery during the first
half of fiscal 1999 as more than a dozen countries followed the U.S. Federal
Reserve Board's lead reducing interest rates to ward off recession. As a result,
a more favorable global investing environment was unfolding as our new fiscal
year got underway.
In the U.S. stock market, stocks of large growth companies continued to
dominate U.S. stock performance. This narrow group of stocks pushed the Dow
Jones Industrial Average to a record high of 10,000 in late March. A change in
investor sentiment in April, however, led to a resurgence of value investing.
Strong first quarter U.S. economic growth in April 1999 and better than
expected corporate earnings across the stock market calmed earlier fears that
financial crises in emerging markets would cause a U.S. recession. As a result,
investors, in general, broadened their stock holdings beyond the select few they
had been counting on to sustain earnings growth if the economy slowed. Some
stocks with sizzling performance through March cooled down in this environment.
In foreign equity markets, similar optimism took hold as many foreign
economies implemented financial reform and several currencies gained strength
against the U.S. dollar. This gave some of last year's worst performing stock
markets--such as Japan, Malaysia, Singapore and Hong Kong--a chance to recoup
losses. At the same time, however, investor confidence in European markets began
to waver due to slowing economic growth and weakness in the Euro.
With this favorable backdrop, Global Dividend and Income Fund (NYSE symbol:
DGF) delivered solid results. The Fund returned +5.39% (at net asset value with
distributions reinvested) for the six months ended May 31, 1999. We benefited
from a return to "value investing" in the U.S. stock market and the high income
from our U.S. and foreign bond holdings. We easily outpaced the average return
of our peers in the Lipper Closed-End Income Fund Average.
The Fund had been trading at a premium to net asset value at the end
of our last fiscal year. At the end of November 1998, the Fund traded at a
+1.15% premium to net asset value. However, Global Dividend and Income Fund's
shares closed at a -6.71% discount to net asset value on May 31, 1999.
Over Global Dividend and Income Fund's lifetime, its average premium has been
about 6%. We believe the Fund's premium could move back into that range given
our expectation that value investments like the Fund will come back into vogue.
Global Dividend and Income Fund's 30-day dividend yield, based on market
price, was 10.30% as of May 31. This was far greater than the 1.23% dividend
yield on the stocks in the unmanaged S&P 500 Index. Roughly one-third of the
Fund's assets were allocated to U.S. high-yield corporate bonds and foreign
bonds, both of which provided significant income during the period.
Conditions in the U.S. high-yield bond market have improved gradually since
our last report. Lack of liquidity and low demand in late 1998 had caused
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prices to decline. In early 1999, however, investors seeking more income began
to venture back into high-yield bonds. Even so, we remain in a difficult
environment for high-yield bonds as new supply has not been met with ample
demand.
Performance in world bond markets was essentially flat as a stronger U.S.
dollar translated to weak returns in non-dollar linked countries. Because we
held a larger percentage of assets in dollar-denominated bonds, the Fund's
six-month return from foreign bonds--around 7%--was well above the -2.3% return
of the Salomon Smith Barney Non-U.S. World Government Bond Index.
On the pages that follow, your Fund's co-managers discuss Global Dividend and
Income Fund's performance during the first half of fiscal 1999. Michael Dugan,
who joined the portfolio's U.S. equity team in 1998, begins with a review of
recent activity in the U.S. stock market. Paul Matlack, manager of the U.S.
high-yield corporate bond component, along with Clive Gillmore, Christopher Moth
and Joanna Bates, your Fund's foreign equity and foreign bond managers, provide
additional insights and an update of the Fund's current positioning.
We thank you for choosing Global Dividend and Income Fund for your financial
plan. As we approach the new millennium, we pledge our continued commitment to
helping you make the most of your investment.
Sincerely,
/s/ Wayne A. Stork
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Wayne A. Stork
Chairman
Delaware Investments Family of Funds
/s/ David K. Downes
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David K. Downes
President and Chief Executive Officer
Delaware Investments Family of Funds
<TABLE>
<CAPTION>
CUMULATIVE/AVERAGE ANNUAL TOTAL RETURNS
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At Net Asset Value for Periods Ended May 31, 1999
Lifetime
March 4, 1994 Premium/Discount
Through as of
Six Months One Year May 31, 1999 May 31, 1999
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Global Dividend and Income Fund +5.39% +1.68% +12.52% -6.71%
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<S> <C> <C> <C> <C>
Standard & Poor's 500 Index +12.60% +21.03% +25.61%
Merrill Lynch High-Yield Bond Index +2.56% +1.67% +9.77%
Morgan Stanley Europe, Australia and
South East Asia (EASEA) Index +1.41% +0.60% +15.90%
Salomon Smith Barney Non-U.S. World
Government Bond Index -4.27% +7.04% -1.97%
Lipper Closed-End Income Fund Average +2.43% +3.36% +11.30%
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</TABLE>
The Fund's total return and the returns of unmanaged indexes shown above assume
reinvestment of distributions. Past performance does not guarantee future
results. The Fund's inception date was March 4, 1994. There were 12 funds in the
Lipper Closed-End Income Fund Average for the cumulative six-month period, 11
funds for the one-year period, and 11 funds for the lifetime period ended
5/31/99, respectively.
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Portfolio Managers' Review
Michael Dugan
Vice President/Senior Portfolio Manager
U.S. Equities
Paul A. Matlack
Vice President/Senior Portfolio Manager
U.S. Fixed-Income
Clive A. Gillmore
Director/Senior Portfolio Manager
Foreign Equities
Christopher A. Moth
Portfolio Manager
Foreign Fixed-Income
Joanna Bates
Portfolio Manager
Foreign Fixed-Income
June 7, 1999
A Spring Break in
Market Leadership
Through much of the spring of 1999, a select group of large capitalization
companies were primarily responsible for the U.S. stock market's gains. Fears of
a U.S. recession resulting from last year's global financial crises caused
investors to focus on these companies for their perceived ability to sustain
earnings and revenue growth in a slower economic environment.
The world's most downtrodden stock markets in 1998--including Japan,
Malaysia, Singapore and Hong Kong--began to rebound in early 1999.
Consequently, investor morale began to improve and recession fears eased
somewhat. Robust first quarter U.S. economic growth and stronger than expected
corporate earnings gave investors even more encouragement.
Such optimism led many investors
to expand their shopping list of stocks beyond a very select group to a broader
array of stocks that offered strong earnings growth potential but could be
bought at much lower prices. We believe this may have marked the beginning of a
new cycle for value stocks.
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Strategic Positioning:
U.S. Stocks
Since last November, we maintained Global Dividend and Income Fund's allocation
to U.S common stocks at just over 30% of adjusted net assets. Our strategy has
been to position the Fund in economically sensitive (or cyclical) stocks that
might benefit from continued U.S. economic growth. We achieved our objective,
benefiting from our holdings in the following sectors:
o Basic Industry. Chemical and metal companies have performed extremely well
since investors got a glimpse of first quarter economic and earnings data.
Individual companies that contributed positively to the Fund's performance
included: DuPont, a leading U.S. chemical firm, Imperial Chemical
Industries, a manufacturer of specialty chemicals and the producer of such
popular paint brands as Glidden and Dulux, and ALCOA (formerly Aluminum
Company of America), the world's premier aluminum manufacturer. ALCOA has
had consistently strong earnings in spite of a decline in aluminum prices
and less overseas demand.
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o Energy. Energy stocks were boosted this past spring by a continuing rise in
oil prices that began early in the year. The price of oil rose from $11 to
$18 per barrel, creating a new enthusiasm in the industry. Our holdings of
Chevron delivered the best results in this sector. Given signs of economic
improvement in Asia and the other parts of the globe, we believe demand for
commodities may start to pick up significantly.
Domestic stocks that did not perform well for us over the past six months
included Real Estate Investment Trusts (REITs), health care and financial
services stocks.
o REITs. Despite their attractive yields and low valuations, REIT stocks
continued to lose ground through March 1999. Investors soured on REITs in
mid-1998 over concerns of paired-share REIT legislation, overbuilding in
the sector, and the potential effects of an economic slowdown on the
capital markets.
The REIT legislation, which limited tax breaks for paired-share REITs,
did not affect the industry as much as expected. Moreover, occupancy levels
for most office, retail and residential properties remain high, reflecting
continued strong demand. And finally, the temporary credit crunch in the
fall of 1998 has eased considerably as lenders have once again opened their
wallets. Following April's shift to value investing, REITs began to win
back investor interest.
We continue to stay the course in REITs (17.9% of net assets) primarily
to take advantage of strong dividend yields. REITs are now yielding around
8% on average as of May 31, 1999, up from about 5% last fall. (Source:
National Association of Real Estate Investment Trusts.)
On May 5, 1999, Michael J. Dugan, Vice President/Senior Portfolio Manager of
Delaware Investments was named portfolio manager for Delaware Group Global
Dividend and Income Fund. Mr. Dugan earned a bachelor's degree in Business
Administration and a Master's degree in finance from Loyola College in
Baltimore. He rejoined Delaware in 1997 after serving as Vice President at
Thompson, Siegel and Walmsley, where he managed value-oriented equity and
balanced portfolios. He initially joined Delaware in 1985. He previously held
positions at Capitoline Investment Services, First National Bank of Maryland,
Mercantile Safe Deposit and Trust Company, and Bache and Company.
On July 8, 1999, Christopher A. Moth and Joanna Bates, both Senior Portfolio
Managers of Delaware International Advisers Ltd., were named portfolio managers
of the international fixed income portion of Global Dividend and Income Fund.
Mr. Moth is a graduate of The City University London. He joined Delaware
International in 1992. He previously worked at the Guardian Royal Exchange in an
actuarial capacity where he was responsible for technical analysis, quantitative
models and projections. Mr. Moth has been awarded the certificate in Finance and
Investment from the Institute of Actuaries in London. Ms. Bates is a graduate of
London University. She joined Delaware International in June 1997. Prior to that
she was an Associate Director, Fixed Interest at Hill Samuel Investment
Management which she joined in 1990.
Mr. Dugan, Mr. Moth and Ms. Bates will work with the Fund's existing
portfolio management team which includes Mr. Clive Gillmore and
Mr. Paul Matlack.
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o Health Care. We believe this area became overvalued in the growth stock
mania of last year. As investors have recently begun to look for stocks
that are relatively cheap and offer the potential for better earnings,
health care stocks--namely drug companies--have fallen out of favor. We
expect to shift portfolio assets out of consumer defensive health care
stocks in favor of increasing holdings in economically sensitive companies.
o Financial Services. The overriding fear of higher interest rates hurt
financial stocks at the end of May. The Federal Reserve Board announced in
May that it was leaning toward raising interest rates to ward off
inflation. Historically, banks have been less successful at generating
earnings in a rising rate environment. We continue to hold First Union,
despite earnings shortfalls, as we wait to see how its recent acquisitions
will play out.
Foreign Stocks:
Troubled Markets Recover
Following last summer's economic and financial weakness in Russia, Latin America
and along the Pacific Rim, many of the world's most affected stock markets
responded positively to a concerted round of global interest rate cuts in late
fall. Pacific markets, in particular, showed marked improvement as financial
backing by the International Monetary Fund, lower interest rates worldwide and
corporate restructuring in Japan contributed to a more positive global investing
environment.
While Japan's progress appears promising, we believe its market as a whole is
expensive. For this reason, we continue to avoid having any direct exposure to
Japan.
Between November 30 and May 1, we increased Global Dividend and Income Fund's
allocation to foreign common stocks from 19.8% to 23.1% of adjusted net assets.
We added to our holdings in Australia and New Zealand--5.8% and 1% of net
assets--because we continue to find stocks with good growth prospects selling at
prices consistent with our value-based investment strategy.
Currency weakness in Europe weighed down returns from European markets. Since
the continent's new unified currency, the Euro, was introduced in January, it
has been weak against the U.S. dollar. Worries over slowing growth in core
European economies--including Germany, France
PORTFOLIO ASSET MIX
May 31, 1999
Convertible Convertible
Preferred Stocks 7.90% U.S. Bonds 2.53%
Cash and Other 1.69%
Non-Convertible
U.S. Corporate Bonds 11.31%
U.S. Common and
Preferred Stocks 33.61%
Foreign Bonds 19.84%
Foreign Stocks 23.12%
(Graphic omitted)
The above chart represents adjusted net assets. Adjusted net assets excludes
debt outstanding.
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and Italy--and, more recently, the prospect of higher U.S. interest rates have
contributed to the Euro's decline. We have been reducing positions in
Continental Europe, while emphasizing selected European markets that we believe
offer the potential for long-term reward.
A Gradual Recovery for
High-Yield Corporate Bonds
U.S. high-yield bonds, which we reduced from 19.5% to 11.3% of adjusted net
assets since last November, have been gradually recovering from a lack of demand
that pushed prices lower last summer and early fall. At the time, U.S.
Treasuries led fixed-income performance as recession-fearing investors fled
riskier investment in stocks and non-government bonds for the safety and
liquidity of Treasuries.
The rally in U.S. Treasury bonds peaked in October when the yield on the
30-Year U.S. Treasury fell to a historic low of 4.72%. Once it seemed that
global economic troubles were contained and that the U.S. economy would remain
healthy, investor sentiment slowly shifted back in favor of high-yield corporate
bonds. This caused Treasury prices to fall and yields to rise. As of May 31, the
yield on the bellwether Treasury was 5.8%, its highest level since last summer.
Rising bond yields during the first half of fiscal 1999 caused the yield
difference between U.S. Treasuries and high-yield bonds to narrow from 6% to
4.7%. Typically, the greater the difference, the more attractive high-yield
bonds look to investors. When high-yield bonds offer less extra income potential
compared to Treasuries, demand for high-yield bonds generally declines. This was
the case in April and May as Treasury rates rose. Demand for high-yield bonds
has not kept pace with a high volume of new supply issued by companies seeking
to take advantage of low interest rates. High-yield bond prices declined as a
result.
Fortunately, our U.S. bond holdings generated enough income to more than make
up for recent price declines. We continue to focus our selection on bonds rated
BB and B. We have a heavier concentration in single B bonds because we expect
them to have greater sensitivity to economic growth and lower sensitivity to
rising interest rates.
Foreign Bonds:
Inflation Fears Take Hold
As investors have become hopeful that the worst of the world financial crises is
behind us, many of last year's most ill-fated economies, particularly those of
Asia, have emerged healthier. However, now we are seeing a growing concern about
inflation, which, until recently, was only a flickering point of interest.
We believe such inflation fears are partially responsible for the struggle
that world bond markets have faced so far in 1999. This comes as an unwelcome
follow-up to last year's economic turmoil in Asia, Russia and South America
which pushed world bond markets lower under the pressure of increased
sensitivity to country and credit risk.
PORTFOLIO COUNTRY ALLOCATION
May 31, 1999
United States 58.60%
Canada 1.60%
United Kingdom 8.90%
Latin
America 3.50%
Australia/
New Zealand 7.40%
South Africa 4.10%
Asian Pacific 2.30%
Continental
Europe 12.00%
Turkey 1.60%
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During the first fiscal half, we increased Global Dividend and Income Fund's
weighting in foreign bonds from 14.30% to 19.80% of adjusted net assets. This
reflects our continuing efforts to take advantage of generous yields in South
Africa, Greece and Poland. In May, we added a 7.5% position in Turkey using the
proceeds from a Mexican treasury bill that had matured.
We did not hold bonds in any Euro-denominated markets during the past six
months. This proved to be a sound strategy in light of the Euro's constant
weakness. Still, we believe the Euro is significantly undervalued. For this
reason, we may shift some of our holdings into European bonds going forward.
Outlook
For the remainder of 1999, we will probably slightly increase Global Dividend
and Income Fund's U.S. stock allocation, with an emphasis on cyclical
stocks--including aluminum, paper, metals, capital-spendings related companies
and energy companies. We believe these companies may benefit the most from
improving worldwide economic growth.
We do not believe modestly higher interest rates will trigger a U.S.
recession. We think a 0.25 percentage point increase was already priced into the
market as of May 31, 1999. If our analysis is correct, we should not experience
any significant fallout in either the U.S. stock or bond markets.
We believe that Global Dividend and Income Fund, which invests in a
combination of U.S. and foreign stocks and bonds, continues to offer the
potential for attractive long-term total return. We are hopeful that the events
of this past spring signal a prolonged period of outperformance for
value-oriented styles of investing like the one we use for the Global Dividend
and Income Fund.
GLOBAL DIVIDEND AND INCOME FUND
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Market Price vs. Net Asset Value
December 1, 1998 to May 31, 1999
PREMIUM/DISCOUNT Data
Current -6.71%
High +1.89% on 12/31/98
Average -4.19%
Low -11.55% on 4/30/99
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Source: Bloomberg Business News. Past performance does not guarantee future
results.
Market Net Asset
Price Value
Dec-98 $15.88 $15.58
Jan-99 15.19 15.38
Feb-99 15.00 15.07
Mar-99 14.06 15.13
Apr-99 14.19 16.04
May-99 14.57 15.61
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Fund Performance
A $10,000 Investment in Global
Dividend and Income Fund since March 4, 1994, the date it began operation, would
have grown to $18,563 as of May 31, 1999, based on net asset value with
distributions reinvested. The average of the Fund's peers provided only 92% of
its return during the same period.
Your Fund's Share
Buyback Program
Your Fund's board of directors approved a share repurchase program in 1994 that
authorizes Global Dividend and Income Fund's lead manager to purchase up to 10%
of the Fund's outstanding shares on the floor of the New York Stock Exchange.
Through May 31, 1999 we did not make use of this option since we did not see
this as the most effective way to add value to the portfolio.
Your Reinvestment Options
Global Dividend and Income Fund offers an automatic dividend reinvestment
program. If you would like to reinvest dividends and shares that are registered
in your name, contact Investors Fiduciary Trust Co. at 1.800.596.8396. You will
be asked to put your request in writing. If you have shares registered in
"street" name, contact the broker/dealer holding the shares or your financial
adviser.
GLOBAL DIVIDEND AND INCOME FUND
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Growth of $10,000 Investment
March 4, 1994 to May 31, 1999
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Lipper Closed-End
Global Dividend Income Fund Average
and Income Fund (11 funds)
3/31/94 $10,000 $10,000
4/30/94 $10,035 $ 9,982
5/31/94 $10,005 $ 9,796
8/31/94 $10,277 $ 9,993
11/30/94 $10,058 $ 9,530
2/28/95 $10,431 $10,280
5/31/95 $11,041 $11,132
8/31/95 $11,523 $11,426
11/30/95 $11,909 $12,115
2/29/96 $12,588 $12,281
5/31/96 $12,965 $12,398
8/31/96 $13,361 $12,619
11/30/96 $14,842 $13,672
2/28/97 $15,590 $14,121
5/31/97 $16,028 $14,360
8/31/97 $16,913 $15,018
11/30/97 $17,572 $15,848
2/28/98 $18,178 $16,467
5/31/98 $18,526 $16,872
8/31/98 $15,911 $16,568
11/30/98 $17,846 $17,001
2/28/99 $17,713 $16,836
5/31/99 $18,563 $17,423
Above performance assumes reinvestment of distributions. Past performance does
not guarantee future results. DGF shares were initially offered with a sales
charge of 6%. Performance since inception does not include this or any brokerage
commissions for purchases made since inception.
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Financial Statements
Delaware Group
Global Dividend And Income Fund, Inc.
Statement of Net Assets
May 31, 1999 (Unaudited)
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Number of Market
Shares Value
-----------------------
COMMON STOCK - 65.56%
Aerospace & Defense - 1.17%
Lockheed Martin ...................................... 30,000 $1,213,125
----------
1,213,125
----------
Automobiles & Auto Parts - 4.20%
Continental .......................................... 26,000 597,047
Dana ................................................. 23,000 1,187,375
Delphi Automotive Systems ............................ 7,688 150,882
General Motors ....................................... 11,000 759,000
GKN .................................................. 102,000 1,669,763
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4,364,067
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Banking, Finance & Insurance - 8.45%
Bayerische Verelnsbank ............................... 7,800 414,902
Commonwealth Bank of Australia ....................... 46,517 747,406
Financial Security Assurance Holdings Limited ........ 18,853 1,069,908
First Union .......................................... 16,200 746,213
Fleet Financial Group ................................ 24,600 1,011,675
ING Groep NV ......................................... 16,316 870,437
KeyCorp .............................................. 26,000 903,500
Mellon Bank .......................................... 30,000 1,070,625
National Australia Bank .............................. 75,430 1,220,918
National Mutual Holdings ............................. 35,000 57,766
Summit Bancorp ....................................... 16,000 655,000
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8,768,350
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Buildings & Materials - 0.48%
Compagnie de Saint-Gobain ............................ 3,200 501,322
----------
501,322
----------
Cable, Media & Publishing - 0.36%
Elsevier NV .......................................... 29,500 373,103
----------
373,103
----------
Chemicals - 1.06%
Bayer ................................................ 20,750 790,549
Orica ................................................ 56,800 313,843
----------
1,104,392
----------
Consumer Cyclical - 0.65%
Alexander & Baldwin .................................. 30,000 678,750
----------
678,750
----------
Electronics - 2.32%
Emerson Electric ..................................... 13,000 830,375
Siemens .............................................. 10,750 720,650
Thomas & Betts ....................................... 20,000 856,250
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2,407,275
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Energy - 5.97%
Centrica ............................................. 81,900 164,886
Chevron .............................................. 14,000 1,297,625
Duke Energy .......................................... 30,000 1,809,375
Elf Gabon ............................................ 2,200 231,757
Royal Dutch Petroleum ................................ 16,200 900,505
RWE .................................................. 11,000 488,934
Texaco ............................................... 20,000 1,310,000
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6,203,082
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Number of Market
Shares Value
-----------------------
COMMON STOCK (Continued)
Food, Beverage & Tobacco - 3.74%
Foster's Brewing Group ............................... 291,542 $ 825,413
Philip Morris Companies .............................. 20,000 771,250
RJR Nabisco Holdings ................................. 24,000 742,500
Southcorp ............................................ 255,000 1,023,880
Unigate .............................................. 77,000 523,927
----------
3,886,970
----------
Healthcare & Pharmaceuticals - 1.69%
Baxter International ................................. 10,000 645,625
Glaxo Wellcome ....................................... 39,370 1,107,461
----------
1,753,086
----------
Industrial Machinery - 1.10%
Deere & Co. .......................................... 30,000 1,141,875
----------
1,141,875
----------
Leisure, Lodging & Entertainment - 0.69%
Bass ................................................. 48,214 715,557
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715,557
----------
Metals & Mining - 1.63%
Alcan Aluminum ....................................... 30,000 840,000
Rio Tinto plc ........................................ 49,000 718,985
Rouge Steel .......................................... 14,800 135,050
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1,694,035
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Packaging & Containers - 0.34%
Amcor Limited ........................................ 66,000 350,899
----------
350,899
----------
Paper & Forest Products - 1.21%
Carter Holt Harvey ................................... 200,000 229,258
Georgia-Pacific Timber Group ......................... 38,300 1,026,919
----------
1,256,177
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Real Estate - 17.93%
Apartment Investment & Management .................... 19,700 827,400
Arden Realty Group ................................... 35,000 894,688
Camden Property Trust ................................ 25,000 685,938
Capital Automotive ................................... 25,000 326,563
Corporate Office Properties .......................... 30,700 245,600
Duke Realty Investments .............................. 38,000 878,750
Equity Office Properties Trust ....................... 25,000 706,250
Essex Property Trust ................................. 27,000 867,375
Franchise Finance .................................... 40,000 985,000
Glenborough Realty Trust ............................. 30,000 549,375
Golf Trust of America ................................ 33,400 814,125
Grove Property Trust ................................. 50,000 643,750
JDN Realty ........................................... 43,500 951,563
Liberty Property Trust ............................... 31,142 751,301
LTC Healthcare ....................................... 1,612 3,123
Macerich Company (The) ............................... 36,000 951,750
Pan Pacific Retail Properties ........................ 33,800 671,775
Patriot American Hospitality ......................... 32,199 167,032
Philips International Realty ......................... 30,000 481,875
Prentiss Properties Trust ............................ 43,508 1,027,877
<PAGE>
10 closed-end income
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Number of Market
Shares Value
-----------------------
COMMON STOCK (Continued)
Real Estate (Continued)
Public Storage ....................................... 32,000 $ 934,000
Reckson Associates Realty ............................ 34,000 879,750
Spieker Properties ................................... 25,000 1,023,438
Starwood Hotels & Resorts Trust ...................... 30,000 982,500
Sun Communities ...................................... 20,000 731,250
Union Du Credit - Bail Immobilier .................... 2,700 365,373
Wharf Holdings ....................................... 107,000 272,496
----------
18,619,917
----------
Retail - 0.82%
Boots ................................................ 65,000 848,650
----------
848,650
----------
Telecommunications - 2.84%
GTE .................................................. 15,700 990,081
Telecom Corporation of New Zealand ................... 189,000 815,977
Telefonica de Espana ................................. 23,834 1,140,764
----------
2,946,822
----------
Transportation & Shipping - 2.86%
Brambles Industries .................................. 55,000 1,466,385
British Airways ...................................... 50,000 355,022
Norfolk Southern ..................................... 35,000 1,146,250
----------
2,967,657
----------
Utilities - 5.43%
BG ................................................... 80,294 442,536
Cable & Wireless ..................................... 88,000 1,077,793
Electrabel ........................................... 1,689 518,483
Hong Kong Electric Holdings .......................... 200,000 626,680
Iberdrola ............................................ 56,000 800,949
PacifiCorp ........................................... 45,000 818,438
Southern ............................................. 25,000 709,375
United Utilities ..................................... 53,000 641,064
----------
5,635,318
----------
Miscellaneous - 0.62%
Eridania Beghin-Say .................................. 2,550 369,761
Jardine Matheson Holdings Limited .................... 64,800 277,344
----------
647,105
----------
Total Common Stock (cost $56,290,934) ................ 68,077,534
----------
WARRANTS - 0.00%
Real Estate - 0.00%
Wharf Holdings Warrants 12/31/99 ..................... 5,350 2,759
----------
Total Warrants (cost $71,913) ........................ 2,759
----------
CONVERTIBLE PREFERRED STOCK - 10.14%
Buildings & Materials - 1.15%
Blue Circle Industries 7.625% ........................ 150,000 488,705
Ingersoll Rand 6.75% "PRIDES" ........................ 24,000 702,000
----------
1,190,705
----------
Cable, Media & Publishing - 0.59%
Metromedia Intl Group 7.25% .......................... 16,900 608,400
----------
608,400
----------
<PAGE>
- --------------------------------------------------------------------------------
Number of Market
Shares Value
-----------------------
CONVERTIBLE PREFERRED STOCK (Continued)
Real Estate - 2.13%
Crescent Real Estate 6.75% .......................... 31,300 $ 524,275
General Growth Properties 7.25% ..................... 38,300 971,863
SL Green Realty 8.00% ............................... 30,000 720,000
----------
2,216,138
----------
Retail - 0.95%
Cendant 7.50% "PRIDES" .............................. 31,000 984,250
----------
984,250
----------
Telecommunications - 0.95%
Comcast 13.40% ...................................... 11,800 986,775
----------
986,775
----------
Transportation & Shipping - 1.46%
Greyhound Lines 8.50% ............................... 26,500 883,245
Union Pacific Cap Trust 6.25% "TIDES" ............... 12,000 636,000
----------
1,519,245
----------
Utilities - 1.65%
Houston Industries 7.00% "ACES" ..................... 15,000 1,717,500
----------
1,717,500
----------
Miscellaneous - 1.26%
Newell Financial Trust 5.25% ........................ 25,000 1,306,250
----------
1,306,250
----------
Total Convertible Preferred Stock
(cost $10,257,165) ............................... 10,529,263
----------
PREFERRED STOCK - 0.64%
Cable, Media & Publishing - 0.64%
Granite Broadcasting 12.75% ......................... 612 660,785
----------
Total Preferred Stock (cost $576,196) 660,785
----------
Principal
Amount+
---------
NON-CONVERTIBLE BONDS - 36.21%
Aerospace & Defense - 0.28%
Derlan Manufacturing sr notes 10.00% 2007 ..........US$ 300,000 294,000
----------
294,000
----------
Banking, Finance & Insurance - 1.58%
Banco Nacional de Comercia Exterior unsec deb
7.25% 2004 ......................................US$ 750,000 663,750
Bank of Greece Series RG unsec deb (loan stock)
10.75% 2010 .....................................GBP 120,000 251,677
National Bank of Hungary sr deb
10.00% 2003 .....................................GBP 400,000 719,650
----------
1,635,077
----------
Buildings & Materials - 0.92%
American Standard sr notes 7.375% 2008 .............US$ 1,000,000 951,250
----------
951,250
----------
Cable, Media & Publishing - 0.49%
Granite Broadcasting sr sub notes
9.375% 2005 .....................................US$ 500,000 506,875
----------
506,875
----------
Chemicals - 0.25%
BPC Holding Series B sr sec notes
12.50% 2006 .....................................US$ 250,000 264,063
----------
264,063
----------
<PAGE>
closed-end income 11
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Principal Market
Amount+ Value
-----------------------
NON-CONVERTIBLE BONDS (Continued)
Computers & Technology - 0.11%
Unisys sr unsec notes 11.75% 2004 ..................US$ 105,000 $ 117,863
----------
117,863
----------
Consumer Products - 0.71%
American Safety Razor Series B sr notes
9.875% 2005 ......................................US$ 475,000 479,156
Fedders North America sr sub notes
9.375% 2007 ......................................US$ 250,000 255,313
----------
734,469
----------
Electronics - 0.23%
HCC Industries sr unsec sub notes
10.75% 2007 ......................................US$ 250,000 241,563
----------
241,563
----------
Energy - 0.36%
Continental Resources sr sub notes
10.25% 2008 ......................................US$ 500,000 375,000
----------
375,000
----------
Food, Beverage & Tobacco - 0.59%
Core - Mark International sr sub notes
11.375% 2003 .....................................US$ 100,000 99,500
Delta Beverage sr notes 9.75% 2003 .................US$ 500,000 514,375
----------
613,875
----------
Foreign Government - 18.60%
Argentina Global Bond 9.75% 2027 ...................US$ 369,000 290,551
Hellenic Republic 8.60% 2008 .......................GRD 250,000,000 939,696
Hellenic Republic 8.70% 2005 .......................GRD 350,000,000 1,263,747
Hellenic Republic 9.20% 2002 .......................GRD 100,000,000 339,859
Hellenic Republic 11.00% 1999 ......................GRD 150,000,000 483,159
Hydro-Quebec (loan stock) 12.75% 2015 ..............GBP 160,000 426,506
Mexican United States Global Bond
9.875% 2007 ......................................US$ 750,000 747,263
New Zealand Government 8.00% 2001 ..................NZD 2,000,000 1,123,055
New Zealand Government 8.00% 2004 ..................NZD 2,000,000 1,166,421
*Poland Global par bond 3.00% 2024 (a) ..............US$ 2,000,000 1,245,100
Poland Govt Bond 12.00% 2003 .......................PLZ 5,500,000 1,438,865
Republic of Argentina Series BGLO sr unsec
unsub 11.00% 2006 ................................US$ 1,500,000 1,387,500
*Republic of Brazil - IDU Series A deb
6.75% 2001 .......................................US$ 246,000 230,471
Republic of Columbia unsec unsub
7.625% 2007 ......................................US$ 1,000,000 780,000
Republic of Korea unsub notes
8.875% 2008 ......................................US$ 1,000,000 1,062,550
Republic of South Africa Series 162
12.50% 2002 ......................................ZAR 14,000,000 2,121,795
Republic of South Africa Series
9.50% 2007 .......................................ZAR 13,000,000 1,512,769
Republic of South Africa Series
13.00% 2010 ......................................ZAR 11,000,000 1,528,172
Republic of Turkey unsec deb 9.00% 2003 ............GBP 400,000 592,882
Russian Ministry of Finance unsec unsub
9.25% 2001 .......................................US$ 500,000 276,875
United Mexican States Global Bonds
8.625% 2008 ......................................US$ 380,000 351,500
----------
19,308,736
----------
<PAGE>
- --------------------------------------------------------------------------------
Principal Market
Amount+ Value
-----------------------
NON-CONVERTIBLE BONDS (Continued)
Healthcare & Pharmaceuticals - 0.35%
Healthsouth sr sub notes 9.50% 2001 .................US$ 200,000 $ 205,750
Paracelsus Healthcare sr unsec sub notes
10.00% 2006 ......................................US$ 200,000 156,000
----------
361,750
----------
Leisure, Lodging & Entertainment - 2.62%
AFC Enterprises sr sub notes 10.25% 2007 ............US$ 250,000 257,500
Cinemark USA Series B sr sub notes
9.625% 2008 ......................................US$ 1,020,000 1,028,925
Hollywood Casino sr sec notes .......................US$ 500,000 496,250
Scott's Hospitality Series A unsec deb
10.95% 2001 ......................................CAD 800,000 585,744
Trump Atlantic City Associates Funding sec 1st
mtg notes 11.25% 2006 ............................US$ 400,000 353,500
----------
2,721,919
----------
Metals & Mining - 0.91%
Weirton Steel sr notes 11.375% 2004 .................US$ 950,000 941,688
----------
941,688
----------
Packaging & Containers - 0.39%
Container Corporation of America Series A
sr notes 11.25% 2004 ............................US$ 200,000 211,500
Pierce Leahy sr sub notes 9.13% 2008 ................US$ 200,000 195,750
----------
407,250
----------
Paper & Forest Products - 0.81%
Domtar deb 10.85% 2017 ..............................CAD 1,000,000 843,845
----------
843,845
----------
Retail - 2.68%
ASDA Group unsec unsub deb 10.875% 2010 .............GBP 250,000 551,364
Ameriserve Food Distribution 10.125% 2007 ...........US$ 500,000 439,375
Cole National Group sr sub notes
9.875% 2006 ......................................US$ 500,000 520,000
Fleming Companies sr notes 10.625% 2001 .............US$ 400,000 404,000
Provigo Series 1991 deb 11.25% 2001 .................CAD 800,000 594,545
Wilsons Leather sr unsec notes 11.25% 2004 ..........US$ 275,000 276,375
----------
2,785,659
----------
Telecommunications - 0.50%
Rogers Communications sr unsec notes
8.875% 2007 ......................................US$ 500,000 513,750
----------
513,750
----------
Textiles - 0.50%
GFSI Series B sr unsec sub notes
9.625% 2007 ......................................US$ 200,000 184,000
Synthetic Industries Series B sr sub notes
9.25% 2007 .......................................US$ 325,000 334,344
----------
518,344
----------
Transportation & Shipping - 0.50%
Atlantic Express sr sec notes 10.75% 2004 ...........US$ 300,000 303,000
Blue Bird Body Series B sr sub notes
10.75% 2006 ......................................US$ 200,000 213,750
----------
516,750
----------
Utilities - 1.75%
AES sr unsec sub notes 10.25% 2006 ..................US$ 400,000 420,500
Korea Electric unsub notes 6.375% 2003 ..............US$ 1,000,000 947,950
Midland Funding II Series A deb
11.75% 2005 ......................................US$ 400,000 450,500
----------
1,818,950
----------
<PAGE>
12 closed-end income
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Principal Market
Amount+ Value
-----------------------
NON-CONVERTIBLE BONDS (Continued)
Miscellaneous - 1.08%
Fischer Scientific International
sr sub notes 9.00% 2008 ..................US$ 250,000 $ 242,500
Huntsman sr sub notes
9.50% 2007 ...............................US$ 500,000 506,250
Larouche Industries sr sub notes
9.50% 2007 ...............................US$ 500,000 371,250
-----------
1,120,000
-----------
Total Non-Convertible Bonds
(cost $39,416,778) ....................... 37,592,676
-----------
CONVERTIBLE BONDS - 3.57%
Automobiles & Auto Equipment - 0.70%
Mascotech sub deb 4.50% 2003 ...............US$ 900,000 723,375
-----------
723,375
-----------
Banking, Finance & Insurance - 0.40%
Bell Atlantic Financial sr unsec deb
5.75% 2003 ...............................US$ 400,000 411,000
-----------
411,000
-----------
Cable, Media & Publishing - 0.89%
Mail-Well sub notes 5.00% 2002 .............US$ 900,000 921,375
-----------
921,375
-----------
Industrials - 0.67%
Thermo Fibertek sub notes
4.50% 2004 ...............................US$ 835,000 701,400
-----------
701,400
-----------
Paper & Forest Products - 0.22%
Repola unsec sub deb
6.50% 2004 ...............................FIM 1,000,000 229,349
-----------
229,349
-----------
Real Estate - 0.69%
IRT Property sub deb
7.30% 2003 ...............................US$ 500,000 508,125
LTC Properties sub deb
8.50% 2001 ...............................US$ 250,000 214,688
-----------
722,813
-----------
Total Convertible Bonds
(cost $3,776,308) ....................... 3,709,312
-----------
SHORT-TERM SECURITIES - 6.23%
Turkish Treasury Bill 0.00%
due 06/07/00 .............................TRL 1,700,000,000,000 2,094,805
**U.S. Treasury Bills 4.19%
due 06/03/99 .............................US$ 4,370,000 4,368,947
-----------
Total Short-Term Securities
(cost $6,586,478) ........................ 6,463,752
-----------
<PAGE>
- --------------------------------------------------------------------------------
Market
Value
-------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 122.35%
(COST $116,975,772) ........................................ $127,036,081
Liabilities Net Of Receivables And
Other Assets - (22.35%) .................................... (23,202,799)
------------
NET ASSETS APPLICABLE TO 6,650,647 SHARES
($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $15.61 PER SHARE - 100.00% ................... $103,833,282
============
- ------------------
ACES - Automatic Common Exchange Security
PRIDES - Preferred Redeemable Increased Dividend Securities
STRYPES - Structured Yield Product Exchangeable for Stock
TIDES - Term Income Deferrable Equity Securities
deb - debentures
sec - secured
sr - senior
sub - subordinated
unsec - unsecured
unsub - Unsubordinated
CAD - Canadian dollar
FIM - Finnish markka
GBP - British pound
GRD - Greek drachma
NZD - New Zealand dollar
PLZ - Polish zlotty
TRL - Turkish lira
US$ - U.S. dollar
ZAR - South African rand
COMPONENTS OF NET ASSETS AT MAY 31, 1999:
Common stock, $0.01 par value, 500,000,000 shares
authorized to the Fund ..................................... $ 93,096,054
Distributions in excess of net investment income (b) .......... (1,332,064)
Accumulated net realized gain on investments .................. 2,026,047
Net unrealized appreciation of investments and
foreign currencies ......................................... 10,043,245
------------
Total net assets .............................................. $103,833,282
============
- ----------------------
*Sovereign debt obligations issued as part of debt restructuring that are
collateralized in full as to principal due at maturity by U.S. Treasury zero
coupon obligations which have the same maturity as the Brady Bond.
**US Treasury Bills are traded on a discount basis; the interest rate shown is
the discount rate paid at the time of purchase by the Fund.
(a)Coupon will increase periodically based upon a predetermined schedule. Stated
interest rate is the rate in effect at May 31, 1999.
(b)Distributions in excess of net investment income includes net realized gains
(losses) on foreign currencies. Net realized gains (losses) on foreign
currencies are treated as net investment income in accordance with provisions
of the Internal Revenue code.
+Principal amount is stated in the currency in which each bond is denominated.
See accompanying notes
<PAGE>
closed-end income 13
Delaware Group
Global Dividend and Income Fund, Inc.
Statement of Operations
Six Months Ended May 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------
Investment Income
Interest ............................................ $2,697,338
Dividends (net of foreign taxes withheld
of $28,353) ...................................... 1,689,055 $4,386,393
---------- ----------
EXPENSES:
Management fees ..................................... 447,547
Professional fees ................................... 53,213
Administrative fees ................................. 50,000
Reports to shareholders ............................. 35,050
Custodian fees ...................................... 14,516
Transfer agent fees ................................. 9,600
Taxes (other than taxes on income) .................. 8,779
Amortization of organization expenses ............... 7,140
Amortization of line of credit organization expenses. 6,830
Directors' fees ..................................... 3,891
Other ............................................... 9,584
----------
Total operating expenses
(before interest expense) ........................ 646,150
Interest expense .................................... 702,252
----------
Less expenses paid indirectly ....................... (1,471)
----------
Total expenses ...................................... 1,346,931
----------
Net investment income ............................... 3,039,462
----------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currencies:
Net realized gain (loss) on:
Investment transactions .......................... 2,463,027
Foreign currencies ............................... (215,065)
----------
Net realized gain ................................... 2,247,962
Net change in unrealized appreciation/
depreciation on investments and
foreign currencies ............................... 52,028
----------
Net Realized And Unrealized Loss On
Investments And Foreign Currencies ............... 2,299,990
----------
Net Increase In Net Assets Resulting
From Operations .................................. $5,339,452
==========
See accompanying notes
<PAGE>
Delaware Group
Global Dividend and Income Fund, Inc.
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
--------------------------
Operations:
Net investment income ............................. $ 3,039,462 $ 7,238,500
Net realized gain on investments and
foreign currencies ............................. 2,247,962 2,903,134
Net change in unrealized appreciation/depreciation
of investments and foreign currencies .......... 52,028 (7,548,958)
------------ ------------
Net increase in net assets resulting
from operations ................................ 5,339,452 2,592,676
------------ ------------
Dividends and Distributions to
Shareholders From:
Net investment income ............................. (4,156,461) (5,813,835)
Net realized gains on investment transactions ..... (1,795,606) (6,017,460)
------------ ------------
(5,952,067) (11,831,295)
------------ ------------
Net Increase (Decrease) In Net Assets ............. (612,615) (9,238,619)
------------ ------------
Net Assets:
Beginning of year ................................. 104,445,897 113,684,516
------------ ------------
End of year ....................................... $103,833,282 $104,445,897
============ ============
See accompanying notes
<PAGE>
14 closed-end income
Delaware Group
Global Dividend And Income Fund, Inc.
Statement of Cash Flows
Six Months Ended May 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
<S> <C>
Net Cash (Including Foreign currency) Provided by Operating Activities:
Net increase in net assets resulting from operations .............................. $ 5,339,452
-----------
Adjustments to reconcile net increase in net assets from
operations to cash provided by operating activities:
Decrease in investments ........................................................ 4,916,439
Amortization of organizational expenses ........................................ 7,140
Net realized gain from security transactions ................................... (2,463,027)
Net realized foreign exchange losses ........................................... 215,065
Net change in unrealized appreciation of investments and foreign currencies .... (52,028)
Decrease in receivable for investments sold .................................... 3,738,977
Decrease in interest and dividends receivable .................................. 274,962
Decrease in payable for investments purchased .................................. (6,377,892)
Increase in interest payable ................................................... 10,860
Decrease in accrued expenses and other liabilities ............................. (315,166)
-----------
Total adjustments .............................................................. (44,670)
-----------
Net cash provided by operating activities ......................................... 5,294,782
-----------
Cash Flows Used for Financing Activities:
Cash dividends paid ............................................................... (5,952,067)
-----------
Net cash used for financing activities ............................................ (5,952,067)
-----------
Effect of exchange rates on cash .................................................. 9,355
-----------
Net increase in cash .............................................................. (647,930)
Cash at beginning of year ......................................................... 742,036
-----------
Cash at end of period ............................................................. $ 94,106
===========
Cash paid for interest ............................................................ $ 691,393
===========
</TABLE>
See accompanying notes
<PAGE>
closed-end income 15
Delaware Group Global Dividend And Income Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------
Six Months Year Year Year Year
Ended Ended Ended Ended Ended
5/31/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................... $15.70 $17.09 $15.81 $14.06 $13.09
Income (loss) from investment operations:
Net investment income ....................................... 0.46 1.09 1.00 0.98 1.14
Net realized and unrealized gain (loss) on investments
and foreign currencies ...................................... 0.35 (0.70) 1.78 2.27 1.15
-------- -------- -------- -------- -------
Total from investment operations ............................ 0.81 0.39 2.78 3.25 2.29
-------- -------- -------- -------- -------
Less dividends and distributions:
Dividends from net investment income ........................ (0.63) (0.87) (0.95) (1.02) (1.32)
Distributions from net realized gains on
investment transactions ..................................... (0.27) (0.91) (0.55) (0.48) -
-------- -------- -------- -------- -------
Total dividends and distributions ........................... (0.90) (1.78) (1.50) (1.50) (1.32)
-------- -------- -------- -------- -------
Net asset value, end of period ................................. $15.61 $15.70 $17.09 $15.81 $14.06
======== ======== ======== ======== =======
Market value, end of period .................................... $14.56 $15.88 $17.31 $15.88 $13.75
======== ======== ======== ======== =======
Total return based on:(1)
Market value ................................................ (2.77%) 2.05% 18.98% 27.42% 29.74%
======== ======== ======== ======== =======
Net asset value ............................................. 5.39% 2.19% 17.93% 24.10% 19.08%
======== ======== ======== ======== =======
Ratios and supplemental data:
Net assets, end of period (000 omitted) ..................... $103,833 $104,446 $113,685 $105,120 $93,500
======== ======== ======== ======== =======
Ratio of total operating expenses to average net assets ..... 2.63% 2.69% 2.67% 2.61% 1.13%
Ratio of total operating expenses to adjusted average
net assets (before interest expense)(2)..................... 1.01% 1.03% 1.02% 1.09% N/A
Ratio of interest expense to adjusted average net assets(2).. 1.10% 1.16% 1.16% 1.06% N/A
Ratio of net investment income to average net assets ........ 5.92% 6.63% 6.03% 6.80% 8.39%
Ratio of net investment income to adjusted
average net assets(2) ...................................... 4.77% 5.38% 4.93% 5.59% N/A
Portfolio turnover .......................................... 49% 51% 68% 88% 101%
Leverage analysis:
Debt outstanding at end of period (000 omitted) ............. $25,000 $25,000 $25,000 $25,000 N/A
Average daily balance of debt outstanding (000 omitted) ..... $25,000 $25,000 $25,000 $20,355 N/A
Average daily balance of shares outstanding (000 omitted) ... 6,651 6,651 6,651 6,651 N/A
Average debt per share ...................................... $3.76 $3.76 $3.76 $3.06 N/A
</TABLE>
- ----------
(1) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purposes of this calculation, to be reinvested at prices obtained under
the Fund's dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based
on market value in periods where there is an increase in the discount or a
decrease in the premium of the market value in periods where there is an
increase in the discount or a decrease in the premium of the market value to
the net asset value from the beginning to the end of such periods.
Conversely, total investment return based on net asset value will be lower
than total investment return based on market value in periods where there is
a decrease in the discount or an increase in the premium of the market value
to the net asset value from the beginning to the end of such periods. The
total investment returns calculated based on market value and net asset
value for a period of less than one year have not been annualized.
(2) Adjusted net assets excludes debt outstanding.
See accompanying notes
<PAGE>
16 closed-end income
Delaware Group Global Dividend And Income Fund, Inc.
Notes to Financial Statements
May 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------
Delaware Group Global Dividend and Income Fund, Inc. (the "Fund") is registered
as a diversified, closed-end management investment company under the Investment
Company Act of 1940, as amended. The Fund is organized as a Maryland
corporation. The primary investment objective is to seek high current income.
Capital appreciation is a secondary objective.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of the close of the NYSE on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Securities listed on a foreign exchange are
valued at the last quoted sales price before the Fund is valued. Long-term debt
securities are valued by an independent pricing service and such prices are
believed to reflect the fair value of such securities. Exchange-traded options
are valued at the last reported sale price or, if no sales are reported, at the
mean between the last reported bid and asked prices. Short-term instruments
having less than 60 days to maturity are valued at amortized cost which
approximates market value. Other securities and assets for which market
quotations are not readily available are valued at fair value as determined in
good faith by or under the direction of the Fund's Board of Directors.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for Federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
Distributions - In December 1995, the Fund implemented a managed distribution
policy. Under the policy, the Fund declares and pays monthly dividends at an
annual rate of not less than $1.50 per share and is managed with a goal of
generating as much of the dividend as possible from ordinary income (net
investment income and short-term capital gains). The balance of the dividend
then comes from long-term capital gains (once a year) and, if necessary, a
return of capital. No dividends were designated as a return of capital for the
period ended May 31, 1999.
Borrowings - The Fund has entered into a Line of Credit Agreement with Societe
Generale for $25,000,000. A total of $120,000 was incurred in connection with
the start-up of the Line of Credit. These costs were deferred and are being
amortized ratably over a period of three years from the date of the first
borrowing (See Note 5).
Foreign Currency Transactions - Transactions denominated in foreign currencies
are recorded at the current prevailing exchange rates. The value of all assets
and liabilities denominated in foreign currencies are translated into U.S.
dollars at the exchange rate of such currencies against the U.S. dollar as of
3:00 PM EST. Transaction gains or losses resulting from changes in exchange
rates during the reporting period or upon settlement of the foreign currency
transaction are reported in operations for the current period. It is not
practical to isolate that portion of both realized and unrealized gains and
losses on investments in equity securities in the statement of operations that
result from fluctuations in foreign currency exchange rates. The Fund does
isolate that portion of gains and losses on investments in debt securities which
are due to changes in the foreign exchange rate from that which are due to
changes in market prices of debt securities. The Fund reports certain foreign
currency related transactions as components of realized gains for financial
reporting purposes, whereas such components are treated as ordinary income
(loss) for federal income tax purposes.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
<PAGE>
Other - Security transactions are recorded on the date the securities are
purchased or sold (trade date). Costs used in calculating realized gains and
losses on the sale of investment securities are those of the specific securities
sold. Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. Foreign dividends are also recorded on the
ex-dividend date or as soon after the ex-dividend date that the Fund is aware of
such dividends, net of all non-rebatable tax withholdings. Original issue
discounts are accreted to interest income over the lives of the respective
securities. Withholding taxes on foreign dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax rules
and rates.
Certain expenses of the Fund are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amount of these expenses was approximately $1,471 for the period ended May 31,
1999. The Fund may receive earnings and credits from its custodian when positive
cash balances are maintained, which are used to offset custody fees. There were
no credits for the period ended May 31, 1999. The expenses paid under the above
arrangements are included in their respective expense captions on the Statement
of Operations with the corresponding expense offset shown as "expenses paid
indirectly."
Organization Costs - A total of $124,000 was incurred in connection with the
organization of the Fund. These costs were deferred and amortized ratably over a
five-year period from the date the Fund commenced operations.
Certain prior year information has been reclassified to conform with current
year presentation.
2. Investment Management, Administration Agreements and Other Transactions
with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company (DMC), the Investment Manager of the Fund, an
annual fee which is calculated daily at the rate of 0.70% of the adjusted
average daily net assets. At May 31, 1999, the Fund had a liability for
Investment Management fees and other expenses payable to DMC of $77,717.
The Fund has also entered into an Advisory Agreement with Delaware International
Advisers Ltd. (DIAL) (the "Subadviser"), an affiliate of DMC. For the services
provided to DMC, DMC pays the Subadviser a monthly fee equal to 40% of the fee
paid to DMC under the terms of the Investment Management Agreement.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide accounting and administration services. The Fund pays DSC a monthly
fee computed at the annual rate of 0.05% of the Fund's adjusted average net
assets subject to an annual minimum of $100,000. At May 31, 1999 the Fund had a
liability for such fees and other expenses payable to DSC of $11,390.
For purposes of the calculation of investment management fees and administration
fees, adjusted average net assets do not include the Line of Credit liability.
Officers, directors and employees of DMC and DSC, who are also officers,
directors and employees of the Fund, do not receive any compensation from the
Fund.
3. Investments
During the six months ended May 31, 1999, the Fund made purchases of $30,179,801
and sales of $42,845,986 of investment securities other than U.S. government
securities and temporary cash investments.
<PAGE>
closed-end income 17
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The cost of investments for Federal income tax purposes approximates cost for
book purposes. At May 31, 1999 the aggregate cost of securities and unrealized
appreciation (depreciation) for the Fund was as follows:
Cost of Investments ............................ $116,975,772
============
Aggregate unrealized appreciation .............. $ 18,296,508
Aggregate unrealized depreciation .............. (8,236,199)
------------
Net unrealized appreciation .................... $ 10,060,309
------------
4. Capital Stock
The Fund did not repurchase any shares under the Share Repurchase Program during
the six months ended May 31, 1999.
Shares issuable under the Fund's dividend reinvestment plan are purchased by the
Fund's transfer agent, IFTC, in the open market.
5. Line of Credit
In February 1996, the Fund had entered into a Line of Credit Agreement with
Societe Generale for $25,000,000. In February 1999, the Fund entered into a Line
of Credit Agreement with Chase Manhattan Bank for $25,000,000. At May 31, 1999,
the par value of loans outstanding was $25,000,000 at a variable interest rate
of 5.50%. During the period ended May 31, 1999, the average daily balance of
loans outstanding was $25,000,000 at a weighted average interest rate of
approximately 5.56%. The maximum amount of loans outstanding at any time during
the year was $25,000,000. The loan is collateralized by the Fund's portfolio.
6. Foreign Exchange Contracts
The Fund will generally enter into forward foreign currency contracts as a way
of managing foreign exchange rate risk. A Fund may enter into these contracts to
fix the U.S. dollar value of a security that it has agreed to buy or sell for
the period between the date the trade was entered into and the date the security
is delivered and paid for. A Fund may also use these contracts to hedge the U.S.
dollar value of securities it already owns denominated in foreign currencies.
Forward foreign currency contracts are valued at the mean between the bid and
asked prices of the contracts and are marked-to-market daily. Interpolated
values are derived when the settlement date of the contract is an interim date
for which quotations are not available. The change in market value is recorded
by the Fund as an unrealized gain or loss. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed. The
use of forward foreign currency contracts does not eliminate fluctuations in the
underlying prices of the Fund's securities, but it does establish a rate of
exchange that can be achieved in the future. Although forward foreign currency
contracts limit the risk of loss due to a decline in the value of the hedged
currency, they also limit any potential gain that might result should the value
of the currency increase. In addition, the Fund could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts.
At May 31, 1999, there were no foreign exchange contracts outstanding.
7. Credit and Market Risks
Some countries in which the Fund may invest require governmental approval for
the repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if there is a deterioration in a
county's balance of payments or for other reasons, a country may impose
temporary restrictions on foreign capital remittances abroad.
The securities exchanges of certain foreign markets are substantially smaller,
less liquid and more volatile than the major securities markets in the United
States. Consequently, acquisition and disposition of securities by the Fund may
be inhibited. In addition, a significant proportion of the aggregate market
value of equity securities listed on the major securities exchanges in emerging
markets are held by a smaller number of investors. This may limit the number of
shares available for acquisition or disposition by the Fund.
<PAGE>
The Fund may invest in high-yield fixed-income securities which carry ratings of
BB or lower by S&P and/or Ba or lower by Moody's. Investments in these higher
yielding securities may be accompanied by a greater degree of credit risk than
higher rated securities. Additionally, lower rated securities may be more
susceptible to adverse economic and competitive industry conditions than
investment grade securities.
The Fund may invest up to 10% of its total assets in illiquid securities which
may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Fund's ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities.
8. Geographic Disclosure
As of May 31, 1999, the Fund's geographic diversification was as follows:
Percentage
of Total
Market Securities
Country* Value At Value
- -------- ------ ----------
United States ..................................... 74,463,467.00 58.62%
United Kingdom .................................... 11,296,430.00 8.89%
Australia ......................................... 6,006,510.00 4.73%
South Africa ...................................... 5,162,736.00 4.06%
New Zealand ....................................... 3,334,710.00 2.63%
Greece ............................................ 3,026,462.00 2.38%
Germany ........................................... 3,012,082.00 2.37%
Poland ............................................ 2,683,965.00 2.11%
Netherlands ....................................... 2,144,045.00 1.69%
Turkey ............................................ 2,083,437.00 1.64%
Canada ............................................ 2,024,134.00 1.59%
South Korea ....................................... 2,010,500.00 1.58%
Spain ............................................. 1,941,713.00 1.53%
Mexico ............................................ 1,762,513.00 1.39%
Argentina ......................................... 1,678,051.00 1.32%
France ............................................ 1,468,213.00 1.16%
Hong Kong ......................................... 901,936.00 0.71%
Colombia .......................................... 780,000.00 0.61%
Belgium ........................................... 518,483.00 0.41%
Russia ............................................ 276,875.00 0.22%
Brazil ............................................ 230,471.00 0.18%
Finland ........................................... 229,348.00 0.18%
-------------- ------
Total ............................................. 127,036,081.00 100.00%
============== ======
- ----------
* Based on the currency in which each security is denominated.
Like any investment in securities, the value of the portfolio may be subject to
risk or loss from market, currency, economic and political factors which occur
in the countries where the Fund is invested.
9. Year 2000
Like other investment companies, financial and business organizations and
individuals around the world, the Fund could be adversely affected if computer
systems used by the Investment Manager and other service providers do not
properly process and calculate date-related information and data on and after
January 1, 2000. The Fund is taking steps to obtain satisfactory assurances that
the Investment Manager and other major service providers are taking steps
reasonably designed to address the Year 2000 issue with respect to the computer
systems that such service providers use. At this time, however, there can be no
assurance that these steps will be sufficient to avoid any adverse impact to the
Fund.
<PAGE>
This Semi-Annual Report is for the information of Global Dividend and Income
Fund Shareholders. It sets forth details about charges, expenses, investment
objectives and operating policies of the Fund. You should read it carefully
before you invest. The return and principal value of an investment in the Fund
will fluctuate so that shares, when redeemed, may be worth more or less than
their original cost.
Notice is hereby given in accordance with Section 23(c) of the Investment Act of
1940 that from time to time the Fund may purchase shares of its Common Stock at
market prices on the open market.
Board of Directors
Wayne A. Stork
Chairman
Delaware Investments Family of Funds
Philadelphia, PA
David K. Downes
President and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA
Walter P. Babich
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
John H. Durham
Partner, Complete Care Services
Horsham, PA
Anthony D. Knerr+
Consultant, Anthony Knerr & Associates
New York, NY
Ann R. Leven+
Treasurer, National Gallery of Art
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
Charles E. Peck+
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
Jan L. Yeomans
Vice President and Treasurer, 3M Corporation
St. Paul, MN
Executive Officers
David K. Downes
President and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA
Richard G. Unruh, Jr.
Executive Vice President
Philadelphia, PA
H. Thomas McMeekin
Executive Vice President/Chief Investment Officer,
Fixed-Income
Philadelphia, PA
Richard J. Flannery
Executive Vice President and General Counsel
Delaware Investments Family of Funds
Philadelphia, PA
Joseph H. Hastings
Senior Vice President/Corporate Controller
Philadelphia, PA
Eric E. Miller
Senior Vice President and Secretary
Delaware Investments Family of Funds
Philadelphia, PA
Michael P. Bishof
Senior Vice President/Treasurer
Philadelphia, PA
+Audit Committee Member
<PAGE>
- --------------------------------------------------------------------------------
Investment Manager
Delaware Management Company
Philadelphia, Pennsylvania
Sub-adviser
Delaware International Advisers Ltd.
London, England
Principal Office of the Fund
1818 Market Street
Philadelphia, PA 19103-3682
Independent Auditors
Ernst & Young LLP
2001 Market Street
Philadelphia, PA
Registrar and
Stock Transfer Agent
Investors Fiduciary Trust Company
210 West 10th Street
Kansas City, MO 64105
1.800.596.8396
- --------------------------------------------------------------------------------
Recordholders as of May 28, 1999: 269
Printed in the USA
on recycled paper
(C) Delaware Distributors, L.P.
(1864)
SA-DGF [5/99] PP7/99
For Securities Dealers [PHOTO OF GLOBES]
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
directors &
officers
DFG
Listed
NYSE
THE NEW YORK STOCK EXCHANGE
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
